Home prices higher in Kentucky, but for less than you might think
Two overarching factors sum up the residential real estate market in the U.S. – supply and demand. Throughout most of the U.S., more people are buying than selling, which has led to a steady uptick in the typical listing prices for the average home, a trend that rising incomes has helped hopeful buyers adequately address.
And while a similar trend is taking place in Kentucky, a state where the cost of living and incomes are lower than the national average, home values aren't nearly as high as they are in other parts of the country, potentially making it a smart time for budget-minded buyers to take advantage of the comparatively favorable conditions.
The main reason for the uptick in home prices is a limited supply of properties. Although conditions are improving somewhat – housing inventory through May was down 3.3 percent from last year, Kentucky Realtors reported. That's the equivalent of 4.3 months, down from approximately 4.5 in May 2016.
What does this mean? If no other properties were to become available – meaning no one decided to sell their house and no newly built houses reached listings – supply would be exhausted in about four and a half months.
Steve Cline, president of Kentucky Realtors, noted that what's happening at the national level is similar to what's going on closer to home.
"With the limited number of homes on the market, buyers who are qualified and ready to buy, are finding a home to purchase and moving quick so they don't miss the chance to own a home," Cline explained. "The economy is stable and interest rates are still low. Getting in the market now makes sense because conditions are right for housing as a whole."
This reality may change if prices continue rising, Cline added, but also referenced that it's more affordable to buy in Kentucky than it is in most other parts of the U.S.
Southern United States has lowest median home prices
Indeed, It's important to keep location in perspective if you're looking to buy a house or apply for a mortgage, because asking prices in the Bluegrass State are more reasonable than elsewhere. As noted by the NAR's chief economist Lawrence Yun, prices are appreciating at the fastest pace in the West. In May, for example, the prototypical houses within that market sold for a median of $395,800, about 7 percent more than a year earlier. But in the South where, of course, Kentucky homeowners reside, the median in May was $233,100. That is also up from this time in 2017, but at a less substantial 4.5 percent.
If entering the housing market is something you're considering, Kentucky Bank has you covered. We offer a variety of mortgage services so you can obtain the loan type that's right for you at a price you can afford.
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